Customer owned banks welcome FSI response

21 October 2015

Yesterday, the Federal Government welcomed all but one of the recommendations of the Financial Services Inquiry (FSI), endorsing a vision for a more competitive, more consumer-friendly banking market according to the Customer Owned Banking Association (COBA).

The FSI or Murray report released last year, concluded that Australia has a financial system where unfair consumer outcomes remain prevalent and policy settings do not focus on the benefits of competition and innovation. The report warned that the high concentration and increasing vertical integration in some parts of the system could limit the benefits of competition in future.

Commenting on the government’s response, COBA CEO Mark Degotardi said, “COBA welcomes the government’s commitment to regularly review competition in the financial system and to increase the accountability of regulators. The FSI delivered a blueprint for reform and the government is to be congratulated for accepting the overwhelming majority of the inquiry’s recommendations. These measures will unleash genuine, sustainable competition in retail banking.”

The government’s support for increasing the resilience of the major banks with stronger capital requirements has the critical additional benefit of enhancing the competitive position of smaller players like customer-owned banking institutions.

“The customer-owned model puts the customer first and, with the implementation of the FSI blueprint, our sector has the opportunity to grow and thrive in a framework that promotes competition and consumer choice,” concluded Mr Degotardi said.